Did Cocaine Cause The Financial Crisis?

Probably not what former Fed Chairman Alan Greenspan had in mind when he spoke of "irrational exuberance."

But exactly what this man blames for fuelling the financial crisis.

Former UK drugs tsar, David Nutt, claims a culture of cocaine in bankers made them "overconfident" and led them to take more risks.

Former stockbroker Geraint Andersen says the professor of neuro-psycho-pharmacology may have a point.

FORMER STOCKBROKER GERAINT ANDERSEN:

"When you are on coke you don't stand back and analyse things. You're 100% sure what you're doing is the right thing. And that kind of over-confidence and arrogance to some extent may explain, or help explain how people can sell products that in my opinion were quite clearly doomed to fail at some point."

Scientists say trading and cocaine go hand in hand. Both boost dopamine, the body's feelgood chemical, which surges when we take risks.

FORMER STOCKBROKER GERAINT ANDERSEN:

"I suppose the thing about coke is, as one guy said, it's about more…all you want to have is more: more coke, more sex, more money…a bigger high."

Tall tales of cocaine abuse have become the stuff of city legend.

FORMER STOCKBROKER GERAINT ANDERSEN:

"After it came out about Bernie Maddoff's ponzi scheme, it became clear that his office was known as the North Pole because there was so much snow in it, which is another word for cocaine."

In 2007 Barclays' David Firth was busted for dealing cocaine at his desk.

"The real problem in finance goes much deeper. It has to do with the architecture of the whole sector. There are deep conflicts of interest across the sector that will keep producing these crises. Coke-heads or no coke-heads."

According to a U.N. report British cocaine use peaked in 2007, a year after bank bonuses reached a record £8.8 billion pounds.

But the collapse of Lehman Brothers in 2008 changed the landscape and dealt a massive blow to the high-octane lifestyles that had gone before.

"The nature of trading is changing very much with the advent of big data. The quants and the geeks are far less likely to do coke than the brash barrow boys who may have been traders before."

FORMER STOCKBROKER GERAINT ANDERSEN:

"I hate to say it but it sounds like a lot less fun than it used to be and maybe that's no bad thing…maybe that means we're going to have a slightly more sensible banking industry…less exuberant, less insane."

While there may be some substance to the argument, claims that cocaine caused the crisis are clearly simplistic.

But, while the good times may be gone, there's no doubt the world economy is still suffering from the mother of all comedowns.